US is leading the way in IT outsourcing

By Lori Angalich | Wed, Oct 03, 2012

Historically, other countries such as India have been the leading markets for IT outsourcing innovation and understanding. Recently, however, more companies in the United States are turning to IT outsourcing providers to take on redundant tasks or monotonous services, freeing up in-house IT staff for larger projects and growth. Thus, companies in the U.S. have started to specialize in outsourcing services to cater to the growing customer base nationwide, allowing the U.S. market to surpass India in innovation and understanding of IT services.

Outsourcing research results A recent study from HfS Research revealed the functions companies are seeking from IT services providers has shifted over the past decade, growing from low labor costs to innovative communication tools, domain knowledge and other industry-specific expertise. The services modern companies are seeking from IT providers are more readily available in the United States, helping boost the market past India.

The study showed domestic IT outsourcing services save companies about 16 percent when working with domestic providers, compared to 22 percent achieved when partnering with companies in India. Other factors that contribute to the value of the IT services, however, more heavily favor domestic providers, including: workforce skills and experience, availability of qualified workers, English-speaking capabilities and familiarity with clients or products. Enterprise executives across a plethora of industries agreed that spending a bit more on domestic services would pay off in the long-term if workers are more qualified.

Researchers discovered several areas of IT capabilities varied greatly between U.S. and Indian providers. About 78 percent of companies found domestic outsourcing providers offered good cultural understanding and communication skills while working together, compared to just 30 percent when partnering with Indian providers. Seventy-two percent of companies praised U.S. providers for business understanding and proactive behaviors, while 37 percent and 38 percent felt the same about Indian services. In terms of innovation, 71 percent of companies felt U.S. providers were on the cutting edge of technology and resources, compared to 41 percent of Indian companies.

Furthermore, the work ethic among U.S. IT providers was slightly higher than Indian companies. About 77 percent of companies gave U.S. providers high marks for hard work, and 71 percent felt likewise about Indian companies. With regard to process adherence, however, both providers were praised for deploying process-driven engagements, with 72 percent in favor of U.S. providers and 71 percent praising Indian firms.